This MB-920 practice question tests your understanding of describe dynamics 365 project operations. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
Which TWO of the following are valid billing methods in Dynamics 365 Project Operations? (Choose two.)
Flat Fee
Why wrong: Not a standard billing method.
Time and Material
Standard billing method.
Fixed Price
Standard billing method.
Retainer
Why wrong: Payment type, not billing method.
Cost Plus
Why wrong: Not a standard billing method.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Time and Material
Time and Material (B) is a valid billing method in Dynamics 365 Project Operations where customers are billed based on actual hours worked and expenses incurred, plus a markup. Fixed Price (C) is also valid, where a single total price is agreed upon for the entire project scope, regardless of actual effort. Both are core billing methods supported in the system for project-based invoicing.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
For each option: why learners choose it and why it is or isn't the right answer here.
Flat Fee
Why it's wrong here
Not a standard billing method.
Time and Material
Why this is correct
Standard billing method.
Related concept
Read the scenario before looking for a memorised answer.
Fixed Price
Why this is correct
Standard billing method.
Related concept
Read the scenario before looking for a memorised answer.
Retainer
Why it's wrong here
Payment type, not billing method.
Cost Plus
Why it's wrong here
Not a standard billing method.
Common exam traps
The trap here is that candidates often confuse 'Flat Fee' or 'Cost Plus' as valid billing methods because they sound similar to industry terms, but Dynamics 365 Project Operations strictly uses only Time and Material and Fixed Price as its two billing methods.
Detailed technical explanation
In Dynamics 365 Project Operations, billing methods are defined at the project contract line level and determine how invoice lines are generated. Time and Material billing uses actuals (time, expense, material) from project journal entries, while Fixed Price billing uses progress-based milestones or completion percentages to trigger invoicing. A subtle behavior is that Fixed Price contracts can still include time and material components if configured with mixed billing methods on different contract lines, but the core methods remain Time and Material and Fixed Price.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
A startup's cloud architect reviews their monthly bill and notices costs are higher than expected for a long-running batch job. Switching from on-demand instances to Reserved Instances — or using Spot/Preemptible VMs — can reduce compute costs by up to 72 %. Questions like this test whether you understand the tradeoffs between commitment, flexibility, and cost across cloud pricing models.
What to study next
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FAQ
Describe Dynamics 365 Project Operations — This question tests Describe Dynamics 365 Project Operations — Read the scenario before looking for a memorised answer..
The correct answer is: Time and Material — Time and Material (B) is a valid billing method in Dynamics 365 Project Operations where customers are billed based on actual hours worked and expenses incurred, plus a markup. Fixed Price (C) is also valid, where a single total price is agreed upon for the entire project scope, regardless of actual effort. Both are core billing methods supported in the system for project-based invoicing.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Read the scenario before looking for a memorised answer.
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Last reviewed: Jun 11, 2026
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